My understanding this is more of a Google thing. The play store will no longer offer new installations of software below a certain API level, even though they will work on current versions of Android.

I believe this is an attempt to enforce some of the permissions changes made around Marshmallow, I believe, where apps now request many permissions at time of use, and not at install. The compatibility layers are a bit 'ugly'.

An interesting side effect is that if you sideload an app that is in this state, Google Play will actually offer to keep it updated, even though it wouldn't allow installation initially.